Barclays has revised its price target for Tesla Inc. (NASDAQ:TSLA) from $325 to $275, attributing the downgrade to weak fundamentals.
What Happened: Barclays, led by analyst Dan Levy, maintained an equal weight rating on Tesla’s stock but lowered the price target following a review of Tesla’s Q1 performance, as reported by Investing.com. Barclays believes that, despite the downgrade, the market could respond positively if sentiment around Tesla improves -- especially with Elon Musk taking a more active role and the upcoming Full Self-Driving (FSD) event on the horizon.
Levy and his team anticipate a low point in Tesla’s gross margin, driven by reduced production volume and operational inefficiencies. This expected drop played a key role in their decision to adjust the price target for Tesla shares.
Barclays has revised its forecast for Tesla's vehicle volume, now anticipating a decrease by 2025. Analysts view this potential drop in volume as a key concern for the company's future, with possible implications for its financial results and market valuation.
SEE ALSO: Musk Firing Thousands Of Federal Workers A Warning, Says Bernie Sanders--’What Do You Think He’ll Do When AI Comes For Private Sector Jobs?’
Why It Matters: The downgrade comes amid a series of challenges for Tesla. A recent lawsuit accused the company of manipulating odometer readings to avoid warranty repairs, further damaging its reputation.
Additionally, Tesla has been scaling back its Cybertruck production and reassigning workers due to a sales slump, indicating potential operational and demand issues. Meanwhile, the EV maker is encountering new obstacles in its production plans for the Cybercab and Semi, stemming from the ongoing effects of the 145% tariffs on Chinese goods imposed by the Trump administration.
These factors, coupled with the projected decline in vehicle volume, could significantly impact Tesla’s market valuation and financial performance in the long run.
However, Wedbush analyst Dan Ives believes that the Elon Musk-led EV giant was ';best positioned‘ to deal with the tariffs relative to the Detroit automakers like General Motors Co. (NYSE:GM), Ford Motor Co (NYSE:F), and Stellantis Inc. (NYSE:STLA). Ives’s remarks highlight Tesla’s solid standing in the U.S. electric vehicle market, where it led with a 43% share of EV sales in the first quarter of 2025.
Notably, Barclays’ revised price target indicates nearly a 14% upside from Tesla’s Thursday close. Over the past month, shares of Tesla climbed 7.13%.
- READ MORE: Mark Cuban Says This Trump Healthcare Order ‘Could Save Hundreds Of Billions’
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
